Tuesday, August 28, 2012

All the ideas are there - it is a question of political will!

The full report of this year's National Day Rally is found here.
. "Think seriously about our future, contribute your ideas and work together to make it happen," 
PM Lee, National Day Rally 2012.
PM Lee invites us to contribute our ideas to the new committee headed by Heng Swee Kiat to engage Singaporeans on where the country should be in the future. Yes, another committee, another conversation and another round of ideas. There is no lack of ideas. That is not the problem. What is lacking is the political leadership and will to implement them.

Lets start with 6 ideas from the PAP Womens Wingn[Six proposals to turn S'poreans into babymakers] to arrest falling birth rates:

- Couples with children or who are expecting a child to be given priority to BTO or repossessed flats at mature estates near their parents
- Allow couples who choose to live with their parents to be eligible for the first-timers housing grant
- Give couples the option of renting a flat while waiting for BTO flat

- Stronger government intervention to create more accessible and standardised quality pre-school centres

- Encourage flexible work arrangements, including part-time work Tax relief for firms hiring part-time or relief employees

- Share four-month maternity leave with fathers. Two of the four to be leave for mothers; allow flexibility over who should take remaining two months’ leave

- Include serious congenital and neonatal conditions in medical insurance
- Enhancement in Baby Bonus to be in the form of subsidised premiums for a “Baby Shield” insurance scheme to mitigate expenses

- Increase subsidy for in-vitro fertilisation and allow eligibility for this subsidy in private sector

Ideas like medical insurance for newborns has been written about by myself more than 5 years ago[Link] and by discussed by Singaporeans for more than a decade - it is not a new idea. It has been brought up many times in the ST Forum and by healthcare professionals to decision makers. I have written about this issue more than a dozen times. However, nothing has been done. Now the PAP Women's Wing finally get this idea, I hope than the PAP men listen to the women and get it done! Why is an idea to take care of the most disadvantaged of Singaporeans born with congenital health issues so difficult to do?  If an idea that is so universally accepted by the Opposition, PAP women and ordinary Singapore takes so long to get implemented, how are we going to make other changes that involve tougher trade-offs? Where is the political will coming from? The other suggestions on housing, HR practices and pre-school have surfaced years ago[Link]....they are nothing new. We don't need another committee to find discover these ideas - we need to get them implemented.

Although late, the announcement of efforts to revamp pre-school [Pre-school set for a shakeup]during the National Day rally is a welcome move. This issue has been discussed for years [Stark contrast between pre-school of the rich and poor] and fixing this is needed to necessary to keep afloat social mobility which the PAP often claims is a sufficient solution for income inequality. I don't buy this but the PAP govt should save this one redeeming aspect of its system which has been going downhill in the last decade before it declines further.

"More help should also be given to low- and middle-income families for childcare and infant care."  - PM Lee.

There is an important mindset switch required to improve fertility. We have to avoid schemes like HOPE that gives out incentives to low income groups to have smaller families. They should instead be provided with more aid to  cope with larger families. In Sweden the basic principle of their programme to improve fertility is to give every woman the ability to have as many children as they want regardless of income by supplementing their financial resources. It is not clear if the PAP will come around to doing this in its effort to improve fertility.

In the PM's rally speech, he again spoke about an inclusive society highlighting  "heart, hope and home".

"What is the next chapter of the Singapore story?" - PM Lee

But the speech falls short on how we can narrow the income gap, the highest in the developed world, that has polarized our nation. How can we be an inclusive society without tackling the most divisive force in our society - the growing gap between rich and poor? 

"SINGAPORE will soon have six universities offering full-time degree programmes, giving 40 per cent of each school cohort a shot at university education right here at home by 2020.
That is up from the current cohort participation rate of 27 per cent. It translates to 16,000 undergraduate places yearly, up from this year's 13,000." -[Link]

Here is that statistics for countries in OECD for % of people having the equivalent of 4-yr college degrees[Source]:

A number of countries already have more than half its cohort attain degrees (based on 2009 figures) and our current 27% is well below the overage in OECD countries. South Korea, for example, has more than 60% attaining college degrees. But it is not just this low figure that is disturbing. Given our competitive education system and making our children go through such a stressful system, we only put 27% of Singaporeans through college when this figure can be higher and the PAP govt chose to give out thousands of scholarships to educate children of foreigners in our universities instead of children of Singaporeans. I don't think this is right. This policy does not serve the interests of Singaporeans. Singaporeans without degrees become disadvantaged when they have to compete with these foreigners given scholarships to study free in our universities.

The PM spent part of his speech berating Singaporeans for  negative behavior towards foreigners:
He said Singaporeans cannot be "one-eyed dragons" - a Taiwanese idiom which means that you only see what you want to see - and we cannot afford to be xenophobic.The Prime Minister also pointed out foreign publications picking up on stories of anti-foreign sentiments in Singapore and how these reflect on us: "It speaks poorly of what sort of people we are, what sort of people we want to be."He emphasised on "heart", that we must "feel for our fellow human beings".
I strongly believe that foreigners when they are allowed work here should be treated fairly. But the so-called anti-foreigner sentiment that our politicians keep highlighting is a result of PAP's own over-zealous policy to import foreigners in large numbers, Singaporeans had, in the past, been very graceful and welcoming of foreigners when the number was reasonable. I can't think of  another nation of people who would behave more gracefully when its govt allows foreigners to form 40% of the population competing along side locals for jobs, housing and cars. The fact that some Singaporeans have reacted negatively is a reflection of how badly constructed the PAP's policy is. To now use terms such as "anti-foreigner" and "xenophobic" on Singaporeans is not only unfair - it shows the blindness of the PAP govt to the plight of ordinary Singaporeans who have suffered as a result of this policy. Calling Singaporeans "one-eye dragons" is very insulting especially when it comes from a govt oblivious to the sentiment and suffering on the ground - there are workers who have lost their jobs when employers hire foreigners to replace them, their are many PMETs  unable to find good jobs when they are older due to structural unemployment because employers can now hire younger foreigner workers. How dare the PM talk about "heart" "feel for our fellow human being" when it comes to foreigners .......when he comes from a political party known for its harsh semi-authoritarian ways - in the past bankrupted and jailed people for speaking up for their fellow Singaporeans. We still remember JBJ. We remember Lim Hock Siew. 

PM speaks about solutions for problems that should have been solved long time ago. The little tweaks and adjustments cannot reverse the direction our society and economy is headed. Ultimately, whatever is unsustainable, be it the rising income gap, rising cost of living, falling fertility rates, ...and the disconnect between the leadership and ordinary citizens...whatever it is that is unsustainable will come to an end. Whether the PAP get ahead of the curve and lead the change or continue to muddle along, change will come simply because we are on a trajectory that cannot last. There is no solution in his speech to close the biggest income gap in the developed world. There is nothing in his speech to alleviate Singaporeans' concerns on healthcare, retirement, housing and structural unemployment. If anything, his speech tells us the govt will drive along the same general direction...and the gap between what Singaporeans want and what his govt does will keep widening. 4 years from now, saying "sorry" is not going to work again.....and this govt will only have itself to blame because there ideas are all there...but there is just no political will to get it done.

Friday, August 24, 2012

What the pawnshop statistics tell us

Where do we often see concentration of pawn shops? Places like Las Vegas and Macau.

"Gambling is harmful for people, stated Wang. He saw many pawn shops around casinos in Macau for people losing in gambling to exchange money to gamble again"[Link]

If you have been observant enough, you would notice the proliferation of pawnshops at estate centers in the HDB heartlands. I wrote about this a few months back[Link]. We know that the situation has deteriorated sharply since the casinos opened. Thanks to the diligence of Leong Sze Hian[TOC article],  we can have a better look at the numbers:

1. June 2012 shows the largest increase in pawnshop pledges. Loans increase to $622M for just one month.
2. Pledges in pawnshops increased from 2.98M in 2010 to 3.5M in 2011.
3. The amounts of loans increased from $2.7B to $4.9B in 2011.
4, Leong projects loans hitting $7B in 2012 given the current rate of growth.

At the same time, we are also seeing rapid growth in consumer debt[Growing Consumer Debt among Singaporeans]. Consumer debt his heading towards the $200B figure. Something is not right and whatever is wrong is probably masked by temporary benign economic conditions since the Global Financial Crisis.  Perhaps we are seeing our own house of cards....right here in Singapore.
Better business for pawn shops as customers raise quick cash for gambling
By Sharon See | Posted: 23 March 2010 2304 hrs
A pawnshop in Singapore
Photos1 of 1

A pawnshop in Singapore

SINGAPORE: The opening of the casino in Singapore has led to better business for some pawn shops.

Pawn shops said they are seeing more customers, especially older folks, who said they are pawning their valuables to raise cash for gambling.

While the number of such customers is small, pawn shop owners said it will rise in the coming months.

However, some industry players have expressed concern.

They feel pawn-broking is meant to help people tide over urgent times, rather than a means to raise quick cash.

- CNA/yb

Saturday, August 18, 2012

Fertility vs Housing Prices .....Part 2

Part 1 shown below. Some people complain not very rigorous and the small sample size of a few selected countries..

Now for part 2 (thanks to a comment in TRE that lead to this research paper).

"This article extends a standard Beckerian model of fertility behavior to formulate the effect of house price (HP) on fertility. The simple model predicts a negative effect of HP on the number of children for a representative household not only through the income effect but also through the compensated substitution effect. The prediction is confirmed by a cointegration analysis applied to the annual data at the aggregate level covering the period from 1971 to 2005 in Hong Kong. It is found that a 1% increase in HP is significantly related to a 0.45% decrease in total fertility rates (TFRs), which is robust in sensitivity tests with an alternative model specification and alternative measures of TFRs. This implies that high HP inflation can account for about 65% of the fertility decrease in Hong Kong in the past four decades." ("JEL" J13, J11, C32) Copyright (c) 2009 Western Economic Association International".[Link[

You can go through the paper yourself but I would think it is all common sense. If housing cost is high, couples delay marriage and having children because of the heavier financial burden of owning a home. Expensive homes mean that couples buy smaller homes to keep their finances manageable. You have small home, you tend to have fewer children because it is uncomfortable to pack too many people in a small home. Expensive homes means one has to service a larger mortgage stretched and that reduces the financial resources of married couples. In short, higher debt ...smaller homes, higher financial burdens ...all lead to lower fertility in a developed country.

So what has been driving up home prices? The massive influx of people from China and India. What do some of leaders tell us is the solution for our low fertility - import more people to keep the economy growing. This will put Singapore and Singaporeans in a vicious cycle:

Why are the same politicians who are willing to spend $10B a year on defense (and maintain this high spending) also asking us to adopt a solution that will shrink the core of our local born population? At the end of the day, what are we actually defending if we are not defending the local population? Given the environment we are in - neighboring countries highly dependent on global trade hence compelled to comply with international norms of behavior - isn't the biggest threat to the future of Singaporeans this vicious cycle they will to put us in?

In an earlier post discussing solutions for our shrinking population, many of the things that need to be done for housing, healthcare and transport to improve our fertility rate are also things we need to do to improve the quality of life of ordinary Singaporeans. We have the financial resources to do all this - what is needed is the political will to make changes and reallocate our national budget to take us out of this vicious cycle.

Thursday, August 16, 2012

Fertility Rate Vs Home Prices...

The amount people have to pay for their homes relative to their income is inversely correlated with Total Fertility Rate (TFR).

One Radical and Risky Idea....

Politicians always avoid coming out with risky ideas because they set themselves up for easy attacks by adversaries  who will point out all the potential negative outcomes. Risky ideas can have huge paybacks and within them can contain ideas that can be adapted to improve the current system.

Speaking at an Institute of Policy Studies (IPS) roundtable on population trends, former NMP Paulin Straughan proposed this radical idea to improve fertility:

Get rid of PSLE, get rid of streaming. Let the child go into school at Primary 1 and enjoy learning all the way through to the entrance exams into university. I think that will be a major transformation for parenting in Singapore.”[Link]

Paulin Straughan proposes  "scrapping streaming and PSLE for primary school students and implement a 12-year primary and secondary school system (with six years for each) that allow students to focus on learning, instead of passing examinations.". If you follow the link I put up, Straughan has other good ideas but this one about PSLE is the most radical.of her ideas. 

Does it make sense? ...Lets start by asking if things make sense in Singapore. Singaporeans work the longest hours, compete extremely hard at school for limited places in universities with a substantial number of places going to foreigners, resources such as cars and housing are limited i.e. the supply is inelastic so the harder we compete prices just shoot up. In order to compete economically,  Singaporeans postpone getting married (increasing number of singles) and having children...and start to diminish in numbers. The capitalistic profit seeking entities demand imported population to keep Singapore going as an economy and native Singaporeans' number shrink relative to new immigrants. This whole setup looks like a race to the bottom for Singaporeans unless we can snap out of this vicious cycle.

Why target PSLE? ....The whole primary school education together with streaming and secondary school banding (10 bands,+Normal Academic, + Normal Technical) has turned our entire primary school education system into a competitive highly stressful high stakes board game[Link].  Instead of inculcating the love of learning, we teach students to compete for marks in exams the purpose of which is to sort out who should go to which secondary school. In doing so it encourages parents to game the system resulting in a billion tuition dollar industry spawned to ramp students up for the PSLE:

"In PSLE 2011, TLL (The Learning Lab) groomed almost a mind-boggling one-half of the top ranking students in the entire country! This included a clean sweep of the first, second and third students overall. No school I know in the private or public sector has delivered such impressive results!"[Link]

Competition starts at a very young age with some parents sending their children to 2 kindergartens every days and spending lavishly on pre-school education. There is also enormous stress for parents who try to squeeze their children into limited places at "branded" schools. Richer parents are known to have moved to homes nearer to branded schools to enhance their children's chances of entering branded schools. Other parents volunteer to do duties at the school to improve their chances. 

The first 6 years of our education system , whatever its intended design, teaches our students compete intensely against each other at exams. They carry this culture of competition against each other into adulthood resulting in the stressful overworked society we see today. This stress is believed to be one of the leading reasons for the ultra-low fertility rate in Singapore. 

So what is wrong with working hard? ...The problem is not that we are working hard is that we are not working smart enough as a society. The Finnish has an almost stress-free education system to produce what is currently the most competitive economy and number one workforce in the world. "Cheaper faster"  individualistic and more competitive" rather than "innovative, creative and team-based". 

By scrapping PSLE, we re-focus our students on learning rather than exams. We teach them team work and how to help each other rather than build a culture of competition against one another. It reduces stress among parents, teachers and students so that they can focus energy on developing the child holistically rather than being narrowly focused on exams, streaming and which secondary school they will end up in. It may have a far reaching effect beyond the education system and ultimately lead to better outcomes for us as a society.

NMP Paulin Straughan idea fpr the education system is the equivalent of Lim Chong Yah's "shock therapy" for our labor market. Even if it does not get implemented for various reasons, it encourages us to think in another direction, move away from old assumptions and generate  new ideas. We should ask ourselves the "why not" rather try to answer the "why cannot"....even if we cannot completely scrap PSLE, we can revamp the system to remove the stress and bring back the fun of learning.  

Remember the future does not need to be the same as the past. Nobody mandates we have to walk along the same direction. If you look at our education system, where really is it heading? We are beginning to resemble the pressure cooker systems in S.Korea[The Herald-Sun - Teen takes reel look at S Korean schools] Japan and China.  There is no competitive advantage going on this path. For a person to realize his full potential, pressure and stress is not required - what stress, streaming, intense competition and banding does is to turn our children into winners and losers. The great irony of this whole system is after putting our own children through "Singapore maths" and other forms of pressuring mental acrobatics, we have fill our universities (esp engineering, maths, physics,science courses...) with foreign students from other countries. We can definitely do better for our own children in this area.

While the idea appears drastic and somewhat risky, remember it can sometimes be riskier to do to little and wait too late....

Wednesday, August 15, 2012

Solving the low fertility problem....

“If we go on like that, this place will fold up, because there’ll be no original citizens left to form the majority, and we cannot have new citizens, new PRs to settle our social ethos, our social spirit, our social norms. So my message is a simple one. The answer is very difficult but the problems, if we don’t find the answers, are enormous” 

We have to be very clear about why we want the fertility rate to go up.  LKY said it very well in the above speech why we need to solve our the population problem and why immigration is not the answer. If Singaporeans who form the core of this country shrink and immigration is used as a solution, much  that we value and want to pass on as a people will start to diminish. Immigration makes the problem worse not better.

Some others have argued that we have an ageing workforce and we need more immigrants to prevent us from losing our competitiveness. Here is the situation:
Yes, our resident workforce is ageing however our total workforce is young. Why? The resident workforce form 2M of our workers and we have 1M foreign workers on work permits and employment pass that are renewed with age as a criteria. The total workforce is "artificially" young as result of the transient component that is "refreshed" every few years. In recent years we have a rising structural unemployment as older Singaporeans find it hard to get good jobs precisely due to this skewed demographics brought about by the foreign influx. So to argue that we need more immigrants to offset an ageing workforce to compete economically is incorrect because we have already overcompensated for this problem in the last 10 years.

So the best way forward, I would argue is to solve the low fertility problem and not resort short term approaches that worsen the situation. Raising our low fertility rate is, however, not an easy thing to do. For a start we have to understand why our fertility rate has fallen. One clear reason is the success of the PAP govt "Stop-at-2" policy that spent a good part of 2 decades telling people to have fewer babies. The PAP govt then move on to a eugenics based policy - they wanted only graduate mothers to have more children. We see the remnants of this thinking in the HOPE scheme [Link]that gives incentives to less educated and poorer parents if they have fewer children - this help "the poor to have fewer children" type schemes is highly discriminatory and depresses our fertility rates. 400,000 or 25%-35% of Singaporean workers have low income [Link] so govt fertility boosting schemes are far less effective if we leave out this large group. In the past few years, the govt has given out incentives in the form of tax rebate that only can be fully utilized by higher income groups - giving money to those who already have money as an incentive to have children is far less effective giving it to those who are poor and  need the extra financial help to raise their children.

We have to superimpose what the PAP govt has been doing on thephenomena of falling birth rates in developed countries.

Developed countries have low birth rates because
  • It is expensive to look after large families
  • More women prefer to concentrate on their careers
  • Increasing sexual equality has meant women have more control over their own fertility
  • There is a ready availability of contraception and family planning advice

In Singapore, it was a deliberate effort on the part of the govt to encourage married women to work to mobilize more people to expand the workforce for economic growth. In fact,  if you're filling the tax forms, you will notice a large number of incentives to encourage married women to work and if a woman is a housewife looking after her children, the family loses out not only on her income but the tax breaks given to families with both parents working. These days due to the rising cost of living, many families have no choice but to have both parents working or they will face financial hardship. As a survival strategy, when we move from developing to developed country, child mortality falls and training/education rises in importance so families in developed countries have fewer children so that they can concentrate their financial resources to nurture a smaller number of children successfully.

All the above explains why our fertility rate is low ...but why does Singapore have the lowest fertility rate in the world?   Our fertility rate has quite incredibly plunged below that of Japan. Singapore has the lowest fertility rate in the world if we count independent nations. If we look at territories, we are right down with Hong Kong & Macau which are part of China[Link]. The 3 places with lowest fertility - Singapore, Macau and Hong Kong also have the highest population density in the world.  High density = high stress = high housing cost = low fertility?

The above tells half the story about fertility. Now for the other. 

Research shows that while fertility rate falls when countries go from developing to developed status, if further economic advancement is made say in per capita GDP, the fertility rate rises back up[Does economic development drive the fertility rebound in OECD countries? ]. When you go from developing to developed country status you have fewer children so that you can educate them better. But if there is further economic advancement and you make more money adding another child to the family becomes less of an issue:

Strangely, it is another phenomena that Singapore shows an abnormaly ...our per capita GDP has risen yet our TFR has fallen monotonically. On paper on a per capita basis. we are richer than many of the European countries with higher fertility rate ..why hasn't our fertility rate rebounded? The answer to that is our income inequality is the highest among developed countries and the increase in GDP is concentrated in the top 10% of the populace - the fruits of our economic advancement have not been shared widely but the cost of this economic progress in the form of higher housing cost, higher cost of living is shouldered by all.

Given all the above evidence, it is clear what needs to be done. The burden of higher cost of living and cost of raising a child has to be addressed. The govt needs to reach out to all including the large segment of low income Singaporeans to solve this problem - it has to stop all discriminatory practices. In the area of education, the govt has to step in to aid poor families in the area of pre-school and give more help to these families to raise their children.  Housing price increase has to be moderated and kept below the rise in median income in order to generate surplus financial resources for middle income families to raise another child. Overall cost of living (inflation) has to be kept down relative to wages - if you look at the chart above on fertility vs PPP (Purchasing Price Parity), fertility swings back up wages rise relative to cost of living.  Take care of healthcare so that parents can have more children without worrying about rising medical costs and especially children born with congenital health issues because this is one of the biggest fear of parents when they have children ...when people find out the govt does not cover these children in its MediShield and parents receive little help to care for these children, they will have fewer children.

It helps a lot if life in Singapore is less competitive and less stressful. We can start with the education system which has turned into one big sorting machine obsessed with exam scores and streaming. There is intense competition for homes, cars, jobs etc.no thanks to the huge influx of foreigners that made scarce resources like COE and housing even scarcer.  

Many of the things that needs to be done to encourage Singaporeans to have more children are things that also raise the quality of life for Singaporean families. It is not a question of whether Singapore has the resources to do this - we seem to have no issue spending $10 billion a year on defense in an increasingly globalized world where nations around us depend on international trade and cannot afford to misbehave...we don't question this high level of spending which is higher than Malaysia and Indonesia combined. But what is the point of spending so much on defense when the people you're defending faces the threat of decline by way of low fertility. The question is whether we have the will to fix this problem and not resort to short term "non-fixes" like importing more people and making the situation worse.

Friday, August 10, 2012

Remembering why we celebrate National Day....

50 years ago, people living in Singapore did not celebrate National Day. Singapore was a British colony and many of our forefathers came here to escape the economic hardship back home to eke out a better life here and return to their countries of origin once they made their fortune.  They were not here to look for a citizenship in a new country but to work as labourers in a British colony.  Singapore's merger with Malaysia was favored by the PAP and it was only after separation with Malaysia that Singapore became an independent nation. In short, nationhood was not a goal or a plan or even an aspiration for many of our forefathers and leaders of that generation but an outcome of our tumultous history.  At that time Singapore was a collection of different ethnic groups each with its own distinct culture and language and many had little sense of belonging to Singapore.  This was the starting point of our nationhood from which we begin to build our sense identity and belonging.

As our roots grew deeper and the bonds among the people strengthened, we begin to treasure what our history has given us. The nationhood that Singaporeans inherited has blossomed with a people that evolved a distinct identity, habits, behavior and an increased sense of belonging. We began to identify with each other and consider ourselves "one people" building up a collective experience and memory of events that have special relevance only to us as Singaporeans. In recent months, there has been increase discussion on integration problems that Singaporeans have with people who have found their way here in recent years. While ugly, unfounded  and sometimes irresponsible accusations of intolerance and xenophobia are tossed around, one thing is now very clear - Singaporeans of all races and religion consider themselves a distinct group from other people around the world. ...if anything, the whole integration debate shows that how far we have come to build and evolved this common identity....and this common identity and with it common values are what we seek to preserve and evolve. Without it, nationhood has less meaning...if we lose this, we would again be a collection of people with little in common.

The challenge for Singapore in this decade and coming decades is how as a small nation we want to strengthen our nationhood as the world globalizes and economic pressures mount for us to take steps in directions that weaken our nationhood. We must remember the path we took to get here to find the right path to that leads to a better future for  generations of Singaporeans that come after us. We must be mindful of actions that will take us backwards to become again to a collection of immigrants without roots gathered in Singapore for purely economic purposes - we have a lot to lose if we allow things to go that way. Some believe that we can always buy strength and protection by spending more and more on defense....but if we are not integrated as one people, this country will be instantly crippled by people without roots leaving at the first sign of trouble.

Today, Singapore society is pulled apart by several polarizing forces - widening gap between rich and poor,  unbalanced distribution of political power brought about by years of semi-authoritarian rule, and a sudden large influx of foreigners have caused integration issues. Loyal Singaporeans feel a need to pull our society back together  to be "one people" with a common purpose.  This goes beyond the "inclusive society" envisioned by our leaders that merely tries not to leave anyone out. We want our roots to grow deeper ...extend and inter-wine with that of our fellow Singaporeans...we want shared success. measured by how well we care for the weakest, poorest and sickest among us. We want a society where people will fight for others willing to defend their fellow Singaporeans not only in war but also help each other during  peacetime when they are economically exploited or unjustly treated or left behind by progress. We have to create something worth defending and that something is not the skyscrapers that makes up our impressive  affluent skyline but something intangible that is planted in the heart of every Singaporean...that makes Singaporeans to do something for each other because they feel they are much more than individuals because they are part of something bigger and more important...part of something that will be handed to future generationss - our common identity, our values, our ideals, our Pledge...One people, One Nation, One Singapore.

Saturday, August 04, 2012

Sports : Home grown vs Imported Success

"To come in late in the day with imported talent and claim they are British success stories isn't about being open to migrants. It's just cheating. Nobody watching will be fooled. If they get medals, we'll feel a little embarrassed. Whether it's swimming or anything else, let's have a sporting culture strong enough for us to know, when we win, that it's a real, homegrown achievement, not a fiddle. Otherwise, frankly, I'd rather we lost." -  Jackie Ashley , The Guardian, Importing Olympic athletes isn't going to fool anybody
The above was written by a British journalist when the British sports councils were considering importing athletes to boost its medal winning hopes in the 2012 Olympics. She concluded that there was "no alternative to serious investments" in home grown sporting talents.
At this point, I'll digress a little to ask you this : Do you know who is the greatest table tennis player in the history of the sport and where he comes from?
The pride in winning an Olympic medal does not come from the winning alone but what the win represents. A country feels proud of its medal winners because the win represents a country's ability to nurture talent in the sport and provide the support to athletes to perform at the highest levels. Small countries, Norway (4.9M), Sweden (9.4M), Finland (5.3M) and Jamaica (2.7M), don't tell themselves they can't win but ask themselves what their own people are good at and how they can be nurtured to win - this is the "can do" spirit. When you import sporting talent just to win, you have given up on your own people and it represents the "cannot do" spirit ...a confirmation that you  don't believe in your own people and their talents. No surprise to me that the sports association that is most active in importing sporting talent to win is led by a PAP MP....it reflects the faith and confidence they have in our own people. Doing things the easy way and "short term-ism" seems to dominate the thinking of our elites. 
Lets now answer the question "who is considered the greatest table tennis player in the history of the sport and where does he come from?". China is the most populous nation in the world with 1.1 billion people and table tennis is the national game of China. But many consider the greatest table tennis player in the history of the sport someone from Sweden. His name is Jan-Ove Waldner. Waldner has 2 World Championships in ’89 and ’97 and Olympic Gold in 92 with a Silver in 2000 and  the World Cup in ’90. The span of his career remains unmatched. His success is proof that small countries can produce world class athletes when they commit themselves to task.
I once attended a leadership course in which the instructor said that you have to believe in the people you lead, otherwise do not be their leader because you will do more harm to them than good.  There is a deeply negative effect when you have elitist leadership telling the people they are never good enough, they cannot be world-beaters and they will be behind everyone else...because what people can achieve is very often a function of expectation and belief in themselves. 
After the instant ecstasy of winning Olympic medals using imports, the happiness quickly wears off as we ponder what those medals really mean to us as Singaporeans. Like what Jackie Ashley said in her article, we are only fooling ourselves. 

Friday, August 03, 2012

Immigration : Using low fertility rate as a justification.....

The National Population and Talent Division (NPTD) has released   a paper to outline  to help Singaporeans understand the options and trade-offs the country has to make in the face of demographic challenges – declining birth rates, a shrinking workforce and an ageing population, for instance. You should read the paper to fully understand what the govt view of the issue. But if you don't have time, here is a video released by the NPTD to explain the issue:

It is not too complicated. The fertility rate of Singapore is very low. Our population is starting to grow old, grey and shrink unless we accept some level of immigration. With an ageing or shrinking population, our economy will shrink - there will be fewer opportunities for all. The govt understands the problems faced by Singaporeans in the form of competition for schools and various integration and play its part to mitigate these problems. The govt will moderate the immigration numbers. It has done plenty and will do more to improve fertility, it will do more to improve productivity. mobilize our resident labor resources like women and encouraging people to work longer. Yes, the govt would like very much to hear your feedback at www.population.sg or via email nptd_contact@nptd.gov.sg.

It is one of those issues where the govt explains why something is needed, says it understands your concern and will have measures to address it and proclaim their approach will lead to opportunities and benefits for Singaporeans. The last time an issue was discussed in this manner was the casinos - casinos (IRs) will create jobs, the govt will contain the ill effects and Singaporeans will be overall better off.

In the past the govt has put forth many other reasons for the foreign influx - businesses find it hard to get Singapore workers, there are jobs Singaporeans won't take, there are skills we cannot find among Singaporeans. It is problematic to use these reasons justify the large influx and does not explain why foreigners are imported for jobs that Singaporeans also do and no employer is required to show proof that he cannot get a Singaporean to do the job when reasonable wages are paid. Maybe this is why the govt has chosen to use the low fertility rate of Singaporeans as a justification for importing more people.

"There will be a smaller base of working-age citizens as our citizen population 
and workforce will age and decline. This is a significant demographic challenge facing Singapore ." - Issues Paper, July 2012[Link].

The thing you have to understand is any baby shortfall today can only be addressed by importing a baby today or an adult 20-30 years from now. Our current low fertility rate does not drive the need for adult immigrants today. It is our fertility rate of 1970s-early 1990s. that created the workforce demographics of today.

You need to maintain 2.1 to have stable workforce demographics. Our workforce today consists mainly of people born in 1970s to 1990s with some unfortunate souls born in the 1940s still working in their 70s because they cannot afford to retire. If we import adult workers to maintain the workforce demographics, and make up for the shortfall in this period, we are talking about expanding the resident workforce by 5-10 thousand a year. This is not what happened:
The Singapore govt brought in 5-10 times the people needed to make up for our shortfall in fertility rate. These numbers do not include the non-PRs here on work permits and employment passes. Basically, when you look around and see a lot of foreigners and new citizens, they are here not because our fertility rate is low,

The main reason for the large influx is to generate economic growth by expanding the workforce and to meet the demands of employers who do not want to pay higher wages to hire Singaporeans. This large influx has several effects one of them is wealth transfer from lower paid wage earners to employers/corporations i.e. rising income gap. It also caused the population density to surge up and housing prices + cost of living to surge up and these may have caused the TFR to drop to the lowest in the world .Macau and Hong Kong are right there with us and these are also the most densely populated regions in the world. The low fertility rate is made worse by the foreign influx is now used to justify more immigration!

Through this huge influx, the PAP govt created a bigger ageing population in 2050 when this large group of new citizens + PRs retire and age at the same time.

If the PAP had imported people primarily to make up for  below-replacement fertility rate in the period of 1970-1990s, the numbers should be smaller and we and would not have so many problems.

Scenario 1 - TFR staying at 1,24, zero immigration.
Scenario 2 - TFR at 1.24, 30K immigrants.
Scenario 3 - TFR at 1.24, 60K immigrants.
Scenario 4 - TFR at 1,85, zero immigration.

Even with TFR rising to 1.85, without immigrants our population will peak at 2030. The reason for this is the baby boomers of 1950s and 1960s when the TFR was above 6 will start to leave this world in large numbers after 2030. It is not clear that as a society we want to fix this one-off phenomena by importing people, To stop the population from declining we have to allow 20-30K of immigrants per year if TFR hovers around 1 - no argument about this.
For many countries, when the TFR falls, they don't resort to importing people so quickly because there is a time lag effect - they have to import babies or adults 25 years later. Singapore in the last 10 years has grown its population at the fastest rate in its history by importing new citizens and PRs does not need  any more immigrants for the next 5-10 years to compensate for low fertility. If we have been importing 30K residents per year since we would have hit 4M residents in 2020(see image above). But we have imported up to 100K residents per year and have already reached 3.79 (Sep. 2011)and we can reach 4M in 2020  even if we do not import anymore residents (30K births a yr x 8 years = 0.24M). Our immigration rate of the last 10 years has over-compensated for low birth rate and we can stop the influx now to find a solution for low TFR in the next 8 years.
The reason why the influx is not going to stop is largely economic. The PAP govt expands the workforce and population to keep the economy growing - it has nothing to do with fertility otherwise the numbers would be much smaller. This is the path of least ideological resistance for the PAP - it believes as an article of faith that so long as the economy is growing and businesses thrive, all other problems can be solved. . All it needs to do is persuade, the people to accept the large influx is necessary by inventing a reason to do what it wants.
30-40 years ago, your parents  were told not to have more children because the PAP was convinced that Singapore's limited land and economy cannot create jobs for so many people. The PAP was so convinced it was right and listened to nobody - your mother protested those harsh measures to punish those  who had more children and it turned out that the fears that the economy would not grow fast enough to create sufficient number of jobs and fears that the population was growing too fast were all unfounded. The PAP policy to reduce birth rates caused a workforce bottle neck and the PAP imported people to fill the gap. 30 years ago, our leaders thought 3M people was too many for Singapore and today the PAP thinks that 5.3M is too few and they want more.
Singaporeans have enough of the govt trying to justify more immigrants when so many problems from the large influx of the last 10 years have remained unsolved and it is not necessary in the coming years to continue with the policy because we have already over compensated for low fertility, that is if they sincerely believe that low fertility is a legitimate reason not an excuse for more immigration.

Singaporeans want the govt to go to the root of the low fertility problem and solve it. The govt effort in this area has been discriminatory, ineffective and unsuccessful:

  • Large part of the incentives are given out as tax rebate benefits only higher income earners and not lower income Singaporeans who do not earn enough to claim those rebates. Any primary school kid will tell you that giving money to someone who already has plenty is less of an incentive than giving it to someone who needs it to help them support their children.
  • Take the HOPE scheme as another example. It is meant to help poorer families with children's education and housing. However, families only qualify for aid if they have only one or 2 children - they get nothing if they have more children. Doesn't a family with 3 children need more help? How does denying help to families with 3 or more children lead to better outcomes for them? This help scheme is hijacked for the purpose of social engineering to discourage certain groups from having more children. With such a low TFR how are we going to succeed if we don't get everyone to chip in and have more children. 
  • When a low income man marries, he faces numerous hurdles put in by the govt to discourage him from getting married and having children. If he has a foreign wife, his wife cannot get PRs even after the family is formed and they have Singaporean children - we give thousands of citizenships and grant so many PRs but we have policies that directly hurt Singaporeans who have served their NS simply because they are poor,  want to start a family.and support their children[Link]. Some of these people are poor as result of the PAP's immigration policy - foreign 3rd world labor brought in to compete against these Singaporeans causing their incomes to stagnate or fall. 

Once you accept immigration as a solution for low fertility, the usual pattern of PAP style leadership behavior will take hold. They will latch on the solution and use it for other purposes such as expanding workforce to grow the economy. It will become less important to encourage Singaporeans to have more children and efforts in this area will be stagnate. Solve the problems cause by the massive influx of the last 10 years and put in more effort to raise the TFR before trying to get Singaporeans to accept more immigration. The low TFR can be linked to problems caused by high influx of immigrants e.g. rising cost of living especially housing. Using one of the causes of the problem to solve the problem just doesn't make a good solution.